The latest poll from Reuters shows nearly 70% of Japanese companies are feeling the immediate impact of the Ukraine war. The majority cited the spike in oil prices as the main obstacle.
This condition is predicted to occur for quite a long time, even consuming more companies. The survey predicts that resource-poor Japanese companies will feel the most serious impact.
A weaker yen is predicted to further add to the cost of commodities and pile more pressure on households.
According to the Reuters Corporate Survey, 69% of companies surveyed said they expect the crisis to hit their earnings. Meanwhile, 9% of them even predicted a bigger impact in the future.
The survey covers 500 non-financial companies in the period March 2 to March 11. About 240 companies responded on the condition of anonymity.
Of the companies worried about the impact of the Ukraine crisis, 63% chose the spike in oil prices as the main concern. Another 15 percent cited supply chain disruption as a major problem.
On the question of which areas should the government focus on, 63% of companies chose efforts to counter energy and broader price increases, 50% chose economic growth strategies, and 43% chose measures to deal with Covid-19.
Business owners are well aware of the impact of the crisis caused by the Ukraine war. They see the potential for price increases in the future which makes consumers choose cheaper products.
Not only that, machine-building workers also complained about the high cost of raw materials and currency fluctuations that continued to occur.
The threat of reduced oil supplies from Russia sent oil prices rising above US$ 100 per barrel, a level not achieved in almost a decade. The increase in oil prices was also followed by increases in the prices of other commodities, from metals to grains.
At the same time, the yen also fell to its lowest level against the dollar in five years.
Quoted from Kyodo, the government of Prime Minister Fumio Kishisa on Wednesday (16/3) is considering putting together a new economic stimulus package to help ease the burden of high energy costs.
Through a separate program, the Japanese government is also considering granting gasoline subsidies for oil distributors to the upper limit in order to reduce production costs.